Germany: Olaf Scholz announces a 7% reduction in VAT to help consumers

In Germany, Olaf Scholz has just announced a temporary reduction in VAT on gas, from 19% to 7%, to help consumers in the face of soaring prices triggered by the war in Ukraine.

© AFP - MICHAEL SOHNschloz-germany

Text by: RFI Follow

2 mins

The German government has decided to temporarily lower the VAT on gas, from 19% to 7%, to help consumers in the face of soaring prices triggered by the war in Ukraine.

This was announced by Chancellor Olaf Scholz on Thursday.


Read more

The reduced VAT rate will remain in effect at least until the end of March 2024 and “ 

we expect businesses to pass this reduction on to customers 100%

 ”, added

Olaf Scholz


The rise in prices " 

is a major burden for many people 

", admitted the head of government in a brief statement to the press.

While prices are already rising rapidly, bills will still increase significantly from October 1, when

gas distributors

will be able - thanks to a new law - to pass on the increase in purchase prices to customers.

Companies will be able to request an additional exceptional levy of 2.4 centimes per kilowatt hour of gas from individuals and companies.

VAT included, this represents some 600 euros more per year for an average household with two children and a consumption of 20,000 KWh.

The coalition government sought to completely exempt this levy from VAT, a measure refused by the European Commission.

Berlin has therefore decided to lower the tax on all consumption, which “

 discharges consumers more 

” than what the exceptional levy costs, assured Olaf Scholz.

New aid at the negotiating table 

The Chancellor also reiterated the promise of a new aid package " 

to ease the pressure on individuals and businesses


The details of the measures are currently the subject of negotiations within the coalition.

Germany has already put in place aid totaling 30 billion euros, including discounts at the pump or the popular 9-euro ticket, which allows travel on public transport and regional trains. for a month.

However, the measure stops at the end of August.

To listen: Germany: it's time for energy savings






Receive all the international news directly in your mailbox

I subscribe

Follow all the international news by downloading the RFI application


  • Germany

  • Energies

  • Olaf Scholz